BoE sees mortgage lending dip as buy-to-let surge wanes
Mortgage lending dropped tothe lowest level since August 2012 in April totaling just £281m,according to the latest figures from the Bank of England.
In addition itsMoney and Credit report found that the number of approvals in April was down by 4,000when compared to March- dipping to66,250 from70,305.
March had seena huge increase in lending as landlords looked to secure properties before April's0.3% increase in stamp duty land tax.
However Richard Pike, sales and marketing director of Phoebus Software, said there is no need for panic, at least just yet, as the dip had beenwidely anticipated.
He said: "Echoing the CML’s predicted gross lending for April the Bank of England has this morning confirmed that lending in April was, predictably, less than the average over the past six months.
"As this was no surprise, especially given the extra lending on buy-to-let in March, our focus must now turn to the future of the market."
However he was less optimistic about thefuture and warned of thepotential risks associated with the EU referendum.
Pike said: "We are but a couple of weeks away from the EU referendum, which is more than likely to have an effect on the economy one way or the other, and conceivably for some time after.
"Lenders, with targets to meet, are currently offering some of the best deals we’ve ever seen which continues to attract, especially in the remortgage market.
"However, as house prices continue to rise lenders are also beginning to look closely again at affordability and income multiples. This could well have an impact in areas where house prices are outstripping wages growth.
"It is undoubtedly a worrying time for the market, but low interest rates and flexible products I think will play a large part in attracting potential borrowers and hopefully ensuring the market doesn’t drop to previous levels."
